Islamic banking stirs up controversy in religiously-divided Nigeria

The governor of the Central Bank of Nigeria is fielding criticism for exacerbating the country's sectarian problems by allowing Islamic banking to make its debut in Nigeria.

ByAlex Thurston, Guest bloggerJune 27, 2011

Since last week, English and Hausa media in Nigeria have been closely following a controversy over Islamic banking in the country. At the center of the controversy is Sanusi Lamido Sanusi, the dynamic and outspoken governor of the Central Bank of Nigeria (CBN). Since his tenure began in July 2009, Governor Sanusi’s bold moves to fire bankers and restructure banks have attracted worldwide attention. This year he is one of Time‘s 100 most influential people. Sanusi is no stranger to controversy: he has already locked horns with Nigerian lawmakers and the International Monetary Fund. Neither is he a stranger to the intricacies of Islamic thought: he is the grandson of an emir of Kano, he holds a degree in shari’a from Sudan, and he has debated religious topics with some of Nigeria’s most famous Muslim leaders.

The Islamic banking controversy concerns last Monday’s announcement that the CBN has given the go-ahead for JAIZ Bank, which the press calls “the first Islamic bank in the country,” and Tuesday’s issuance of final guidelines pertaining to Islamic banking in Nigeria. Although, as Nextpoints out, “a draft framework for non-interest banking was issued in March 2009 by the [CBN], its position on Islamic banking did not become much of an issue until a few months ago when the final guidelines were released.” Sanusi ordered the guidelines to be rewritten in order to address and/or incorporate criticisms, but some Christian groups continue to denounce the changes.

“Honestly, if Governor Sanusi Lamido Sanusi had done this advocacy for Islamic banking as a religious leader, it would have made a better sense than as a government official. Therefore, Sanusi should come out and tell the nation whose errand he is running and for who he speaks; is it for himself, Islam, or government of Nigeria?

“The PFN, Kaduna State, strongly condemns the Central Bank governor’s Islamic banking agenda at a time like this in Nigeria when we are still battling to douse the tension created by the last ‘political’ crisis with all the evident religious manifestations.This obviously is an insensitive and reckless act of the highest order coming from such a high ranking officer of the Federal Republic of Nigeria.

“No right thinking Nigerian would ordinarily venture into such a sensitive matter at any time in such a nation like Nigeria without an evil motive to create more tension in the nation or worse still to start another religious fighting such as had never been before in this nation.“Somebody, please, help tell Sanusi to let the sleeping dog lie, and not put the nation into another avoidable distraction and dangerous crisis. We call on President Goodluck Jonathan not to wait until trouble begins before acting.”

Sanusi has responded to criticisms by saying that the attention to Islamic banking at CBN predates his tenure and that what is called “non-interest banking” attracts the involvement of non-Muslims as well, including backers of the JAIZ Bank. Sanusi has also highlighted the presence of Islamic banking systems in other countries around the world, including the United Kingdom.

The controversy has relevance for at least three reasons. First, it affects Muslim-Christian relations, and shows how interreligious tensions appear not only “on the ground” in terms of physical conflict, but also in debates among elites over questions of national policy. Second, it forms part of ongoing changes in Nigeria’s financial system. Finally, this controversy will be another challenge – and opportunity – for Governor Sanusi, who is one of the most important figures now in Nigerian politics. Judging from the wide press coverage the controversy is receiving, many Nigerian elites will be watching closely to see how the controversy unfolds.

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